True, I think most people were expecting something bigger though. Especially when you hear numbers like 150 handcrafted dungeons, 300 in game books, 6-7x as many quests as Fallout 3 (There is definetly more than that), game world same size as Oblivion, better textures, 10x more voice actors etc
I know compression techniques are better but still for all that it seems a bit small, those boys at Bethesda are pretty clever to pack such a large punch into such a small space......... maybe that's why the PC version doesn't work properly
Point is, the dungeons don't take up much space. Probably 1MB each max. It's just a bunch of coordinates for the items in them. The same goes for books. They are a few KB each.
What takes up 95% of modern games is two things. Sound and textures. They claim to have used a new compression for sound which would partially explain why the game is smaller. But everyone who played it can see that the textures are pretty low res compared to other games. That's where they saved most space, in my opinion.
I personally would have preferred higher resolution textures and a bigger game. But they did a decent job of making it look good with such low res textures, honestly.